Credit rating raised inadvertantly for development authority

A credit rating agency acknowledged this week that it inadvertently upgraded the rating for the DeKalb Development Authority, before promptly returning it to the lower rate.

Moody’s Investor Services' return to a Baa2 rating – from the higher Aa2 rating – did not hurt DeKalb County’s ongoing effort to boost its own credit ratings for general borrowing and water/sewer and sanitation projects.

The agency has sold bonds to help the county on projects in the past, such as $10 million for the Lou Walker Senior Center. A better rating could improve DeKalb County’s struggling financial image.

“Just for the overall image of DeKalb County, it certainly would be nice for all government and quasi-governmental agencies to have the highest rating possible,” county spokesman Burke Brennan said. “But in terms of the effect on the county, their rating does not matter.”

The corrected rating involves just one authority project, $10.5 million in revenue bonds issued in 2004 for the Memorial Drive annex buildings. Moody’s previously had assessed that project as Baa2, or moderate risk.

The county pays the authority $750,000 per year to lease office space for its tax commissioner, board of elections and others. The county can end that lease each year, which is why Moody's considers the bonds a slightly greater risk.

The authority also can no longer sell bonds based on money the county puts up to pay the debt. A 2009 state Supreme Court ruling requires the development authority to obtain voter approval before issuing any new public debt or tapping the tax-exempt bond market for private projects.

DeKalb Chief Executive Burrell Ellis said the county has no immediate plans for new bonds with the development authority.

DeKalb is focused instead on keeping and improving the ratings on its $434 million of general obligation debt and an upcoming $1.35 billion deal for water/sewer upgrades. Earlier this month, Moody’s kept the general obligation rating steady at Aa3, which means better interest payments on borrowing.

“Those are the ratings that affect taxpayers,” Ellis said. “What we’re concerned about are the big ones that matter for the average citizen.”